Elite Solutions Tax

Taxpayers have two options when completing a tax return, take the standard deduction or itemize their deductions. Most taxpayers use the option that gives them the lowest overall tax.

STANDARD DEDUCTION
The standard deduction amount increases slightly every year and varies by filing status. The standard deduction amount depends on the taxpayer's filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent.

Not all taxpayers can take a standard deduction, which is discussed in the Instructions for Forms 1040 and 1040-SR. Those taxpayers include:

•A married individual filing as married filing separately whose spouse itemizes deductions—if one spouse itemizes on a separate return, both must itemize.
•An individual who files a tax return for a period of less than 12 months. This is uncommon and could be due to a change in their annual accounting period.
•An individual who was a nonresident alien or a dual-status alien during the year. However, nonresident aliens who are married to a U.S. citizen or resident alien can take the standard deduction in certain situations.

ITEMIZED DEDUCTIONS
Taxpayers choose to itemize deductions by filing Schedule A, Form 1040, Itemized Deductions. Itemized deductions that taxpayers may claim include:

•State and local income or sales taxes
•Real estate and personal property taxes
•Home mortgage interest
•Mortgage insurance premiums on a home mortgage
•Personal casualty and theft losses from a federally declared disaster
•Gifts to a qualified charity
•Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income

New year, new tax law! Starting in 2022, mobile payment apps like Venmo, PayPal, Cash App and Zelle are required to report business transactions totaling more than $600 per year to the IRS. If you own your own business or have a side hustle and get paid through these payment apps the key thing to know is that it doesn’t apply to your 2021 tax return. It will apply to the earnings you make throughout 2022, which you’ll report when you file in 2023.

Have questions? Get in contact with us!

#2022

It's that time of the year to start gathering and organizing your tax records. Taxpayers should gather any and all documents from earnings including (if applicable):

- Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
- Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim recovery rebate credit
- Letter 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage

File your Taxes with us! Contact us to setup up your appointment.